Summary:

The Plastic Trap, a documentary and the long story in The New York Times has prompted me to write this piece, which has nothing to do with broadband, technology, but about our modern lives. The Times story deals with rising credit card debt, and how the […]

The Plastic Trap, a documentary and the long story in The New York Times has prompted me to write this piece, which has nothing to do with broadband, technology, but about our modern lives. The Times story deals with rising credit card debt, and how the modern day loan sharks, aka banks, are squeezing the consumers by tacking on stupifying interest rates and penalties for late payments. The situation reminds me of the heroin dealers, who get you addicted and then well… you know the rest.

Thrift, prudence, and self-reliance were the cornerstones of the American ethic and they made America an economic giant. But this culture has undergone a 180-degree turn. Americans are spending money they don’t have, by borrowing. In the past four years, America and Americans have gone on a borrowing spree, spending what they don’t have.

Individuals have spent on things like luxury cars, Sub-Zero refrigerators and vacation homes, while the U.S. has bought a few hundred-fighter jets and even a country or two. Some quick facts on debt: The average American has a staggering $9,000 in debt on his credit cards. You can find a direct correlation between the housing bubble and the rising debt of Joe & Jane citizen. People are borrowing, refinancing their homes, using the cash to pay off debts, and then borrowing some more. It is not a good trend. I know how tough it is to get out of the debt cycle. If the New York Times story doesn’t open your eyes to ills of credit, and how credit card companies will eventually squeeze you dry, then nothing ever will.

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By Om Malik

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